SMM Evening Comments (Jan 21): Nonferrous metals on the SHFE rose across the board after Biden's inauguration

SHANGHAI, Jan 21 (SMM) – SHFE nonferrous metals all closed higher on Thursday January 21. Copper added 0.41%, aluminium rose 1.7%, zinc advanced 0.96%, lead increased 1.1%, nickel gained 0.66% and tin jumped 2.31%. 

SMM data showed that stocks of 6063 aluminium billet across the five major consumption areas – Foshan, Wuxi, Huzhou, Changzhou and Nanchang – in China expanded 1,600 mt from the prior week to 84,300 mt as of January 21.

Social inventories of primary aluminium across eight consumption areas in China, including SHFE warrants, declined 15,000 mt from the prior week to 669,000 mt as of January 21. COVID-induced transport restrictions reduced arrivals of cargoes in Wuxi and Nanhai.

Copper: The most-active SHFE 2103 copper contract finished the day 0.41% higher at 59,340 yuan/mt, with open interest rising 3,546 lots to 128,000 lots.    

Biden was sworn in as the 46th president of the United States on Wednesday, vowing to end the “uncivil war” in a deeply divided country reeling from a battered economy and a raging coronavirus pandemic that has killed more than 400,000 Americans. On his first full day in office, President Joe Biden released the details of his sweeping plan to combat the coronavirus, announcing 10 executive orders and directing agencies to use wartime powers to require U.S. companies to make N95 masks, lab equipment, swabs and other equipment to fight the pandemic.

The WHO planed to approve multiple COVID-19 vaccines produced by Western countries and Chinese manufacturers in the coming weeks and months. Research showed that Pfizer's vaccine is expected to be effective against the virus variant in Britain, and the South African strain may be more difficult to prevent.

The US homebuilder confidence index fell to a four-month low in January, weaker than expectations.  

Whether the March copper contract could return above 59,500 yuan/mt tonight will be watched.

Zinc: The most-liquid SHFE 2103 zinc contract added 0.96% to end the day at 20,540 yuan/mt, with open interest decreasing 4,064 lots to 87,529 lots. Zinc prices are likely to remain strong tonight.

Nickel: The most-traded SHFE 2103 nickel contract ended the day 0.66% higher at 135,690 yuan/mt, with open interest increasing 12,383 lots to 202,159 lots. US weekly jobless data set for release tonight will be monitored.

Lead: The most-liquid SHFE 2103 lead contract rose 1.1% to close the day at 15,190 yuan/mt, with open interest rising 1,122 lots to 39,396 lots. Lead prices are likely to remain firm in the near term as supply tightens as secondary lead smelters suspend production for the upcoming Chinese New Year holiday. SHFE lead still faces great pressure from the 15,200 mark as downstream users have gradually completed pre-holiday stockpiling.

Tin: The most-traded SHFE 2103 tin contract surged 2.31% to finish the day at 161,720 yuan/mt after hitting an all-time high at 161,800 yuan/mt earlier in the session, with open interest increasing 5,994 lots to 39,188 lots. Concerns over tin supply supported its prices.